9 Benefits of Outsourcing Software Development

Milo Team

Milo Team


The huge size of the IT outsourcing market in Europe (over $100 billion) is likely no surprise to anyone reading this but why are more organizations choosing to outsource software development projects?

In this article:

  • What is outsourcing? Go to text
  • Software development outsourcing benefits Go to text
  • Outsourcing: the smart move…but not without its risks Go to text

Software development is one of the most frequently outsourced IT functions, with over 60 percent of tech companies now outsourcing at least a part of their application development. Almost two-thirds of outsourced IT services relate to software application development.

Custom software projects are often mission-critical for businesses so entrusting a project to an external team doesn’t usually come without some doubts or sense of risk.

However, the benefits of outsourcing software development have been demonstrated over many years now — it’s now viewed as the norm than the exception to the rule. And it’s not only because of the reduced costs; the right outsourced team can bring many other benefits to the table.

Let’s take a closer look at outsourcing and run down the benefits you can expect from outsourcing your software project to a trusted team of developers…

What is outsourcing?

Outsourcing is the practice of working with external vendors to accomplish various business goals.

This practice is increasingly used across key business processes, such as information technology (IT), HR, payroll, inventory management, content development, etc.

Software development is the leading area of IT for business outsourcing. Contracts may be for a one-off development project or, with some one-stop-shop development teams, a more comprehensive agreement that includes ideation and design, development, testing and more.

Some one-stop shops become trusted tech partners and consult on a variety of IT matters.

Developing new applications or enhancing new ones (web, mobile, etc.) and then maintaining those applications is increasingly accomplished out-of-house.

That’s because of the many advantages that outsourcing has over handling such major projects in-house…

Software development outsourcing benefits

From our experience of managing software development projects for all types of organizations over the past decade, the following are the main benefits of outsourcing:

1. Significant cost savings

Unsurprisingly, perhaps, the cost savings associated with outsourcing software development are a leading benefit. This can provide an important competitive advantage for a business (lower costs mean higher profits and lower prices for customers of the business).

The potential cost savings work in many different ways and it’s estimated that almost two-thirds of companies outsource application development for this reason.

For U.S. or European companies, outsourcing to the right team of developers takes advantage of lower salaries paid in other parts of the world, helping to control costs.

Less obviously, qualified and specialist outsourced teams can often look after the entire project from start to finish, meaning that the same team becomes familiar with the business needs, driving the project to coincide with these needs. Also, a proficient outsourced team of software development professionals is less likely to make costly errors that can blow the project’s budget.

The costs of hiring developers, paying employee benefits. maintaining hardware and systems, running training programs, paying office rentals and meeting many other ad hoc expenses add up quickly.

So, all in all, a reliable outsourced development team often translates to considerable savings compared with managing the project in-house. Some estimates suggest that outsourcing reduces the overall application development cost by 20 to 30 percent.

2. A large pool of high-quality talent

Saving costs is no advantage if the quality of the work is reduced. If you select the right software development team, you won’t need to lose any sleep over that.

In many of the top outsourcing locations, such as Poland, India, and elsewhere the pool of English-speaking talent is vast and often superior to what’s available at home.

Highly skilled, innovative, professional developers reside all over the world — why limit your access to talent simply because of the location of your business?

3. Agile development environments lead to better results

The “agile methodology” is a proven effective way to manage projects by breaking them up into phases, incorporating collaboration with stakeholders and continuous improvement.

An agile development environment, as found in the best outsourced software development teams, can help projects achieve the required level of quality, speed and efficiency while also providing important fail-safes.

During the various project phases, collaborators detect and fix any bugs to ensure the final product precisely meets the client’s needs.

4. Speed to market

Software projects are often time-sensitive and delays can end up costing tens of thousands of dollars (or more).

If being first to market is an essential factor, as is common for startups, the long product development lifecycle (months or even years depending on the scope) can derail progress unless you have the developers, project managers and testing manpower available.

Can you be sure that your in-house team will meet the deadline?

The best custom software development houses have large teams of designers, engineers and testers who can ramp up operations as needed and overcome bottlenecks to meet strict deadlines even with large enterprise projects. This accelerates the software development life cycle to ensure that everything is completed, tested, and ready to go on time.

5. No hiring hassles

Many businesses simply don’t have the capacity necessary to manage large software projects. To handle it in-house would require a hiring and onboarding process that would eat into the time it takes to get to market —with no guarantee that the talent is locally available.

With the right outsourced custom software development team, these hassles are avoided as the pool of talent is right there and ready to get to work remotely whenever you give the green light for the project.

6. Focus on ideas and competencies

Another key benefit of outsourcing software development projects is that you get to focus on your creative ideas, main competencies and core business objectives — rather than the day-to-day issues involved with developing applications.

Outsourcing frees up your people’s time to innovate and grow the business without spending time on how to actually deliver the idea to market. You can leave the “mechanics” and technical side of the application development to the outsourcing team.

7. Achieve goals more efficiently

During the consultation and planning stage of projects, our development team has often been able to suggest new and improved ways of achieving the business goals for a client.

A business owner may have an idea and suggest a way to achieve it but experienced outsourced software professionals can often listen to the core business goals and recommend other more effective ways of accomplishing the goals, based on their experience.

This type of expertise may not be available in-house and can add new dimensions to projects, such as introducing the use of AI or data analytics not previously considered.

8. One-stop shop for design, development, testing and beyond

Some software outsourcing developers have evolved into one-stop shops, looking after the full cycle of software development, from ideation and design through development to testing and providing further expertise and cost savings for organizations.

New applications must undergo manual and automated testing before launch to ensure that all quality standards are met. Developers must often write sophisticated automated tests for various programming languages and frameworks.

This requires the type of expertise rarely found in-house and increasingly available from the best outsourced application development teams.

9. A trusted partner for the future

If you find the right outsourced software development team. you’ll have a trusted tech partner to help and advise you on more than a single application.

By building a long-term relationship with your development team, you may have a direct line to the type of expertise that not only advises you on making your business operations more efficient but acts as an important tech partner for the future, helping with upgrades, migrations, compliance management, cybersecurity, and so on.

Every year, technologies like AI and blockchain advance. With a solid understanding of the latest tech available, you’ll be better prepared for the future, with a pool of expertise to help you innovate in line with your main business goals.

Outsourcing: the smart move…but not without its risks

Outsourcing software development can help increase the efficiency of your business, regardless of its size or sector. However, the many clear benefits don’t mean that outsourcing is not without its risks.

We’ve all heard horror stories: delays, aborted projects, expensive budget blowouts, etc. Software projects are complex and language barriers and cultural nuances only add to the challenges.

So, the single most important software development outsourcing decision you will make is the team you select to entrust your project to. Very few offer the “complete package”.

If you’re considering a custom software development project, please contact the experienced, reliable team and approachable team at Milo Solutions.

We’ll align your software development project with the overall business direction and ensure you’ll be delighted with the entire outsourcing experience.




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